Page for page The Lean Startup by Eric Ries might just be the most valuable book of 2011. Not since Guy Kawasaki’s The Art of the Start has a work on startup ideology been as encompassing or as densely packed. Ries is a passionate teacher and it shows. He leaves no stone unturned when it comes to the topics of gaining and maintaining users, interpreting customer behavior, and making tough and drastic changes.
There’s a lot of material covered in the book, but here are 5 lessons that stood out:
1. Never make assumptions
Assume nothing and test everything is the mantra of a lean startup. Ries points out multiple times, with companies both large and small, that even our best assumptions are often incorrect. Leave as little to chance as possible.
2. Get out and interact with customers
Customer feedback is vital for a startup no matter what size it may be, but it’s especially crucial in the early stages of growth. Get out and talk to your customers. Find out what they can and can’t live without. Prod and ask the tough questions. Good feedback is priceless and goes far beyond what analytics can provide.
3. Avoid measuring with vanity metrics
This one hits close to home, because it happens far too often and we all fall victim to it. Vanity metrics are the numbers that may appear to be beneficial, but are actually misleading in that they provide a false sense of accomplishment. If a product is seeing more signups month over month, is it because of an improvement in the product, a search marketing campaign, or something else? An educated guess is still just a guess.
4. Find a viral coefficient that leads to growth
Marketing professionals need to understand what a viral coefficient is and how to measure it. The viral coefficient is in simple terms the rate at which something is being spread. Any number greater than 1 is an indicator of growth; any number less than 1 and sooner or later you’ll be out of business.
5. Welcome experimentation and innovation
At the core of the lean startup methodology is the belief that a company should be able to quickly gather input, make adjustments, ship a product, and completely change direction if needed. Ries claims that startups must be agile enough to make bold changes and not be afraid of adjusting expectations, even if they change vastly over a span of time.
This short list by no mean does justice to the variety of experiences and tactics outlined in the book. If you market for, work in, or are at all vaguely interested in startups (or really any business for that matter), The Lean Startup should be at the top of your reading list.